Eskom Improves Operational Efficiency At Kusile And Medupi

From improving the balance sheet to correcting defects at the Kusile and Medupi power plants, Deputy President David Mabuza says the task team on Eskom is pleased with the progress of the recently-appointed transformation management office.

The Deputy President commented: “In line with achieving operational efficiency, five units at Medupi and Kusile power stations that had design defects have been corrected, and this will contribute to sustainable energy provision by our new build programme.”

“For instance, Kusile Unit 2 has added 720 megawatts to the national grid since its commercial operation in October 2020. Major defects at Ingula Pumped Storage Scheme, have been addressed and each of the four units are now performing at full capacity of 331 megawatts from previous 245 megawatts,” explained Mabuza.

“Further, transmission network performance has returned to expected levels, and distribution performance remains stable,” he added.

The Deputy President said with regards to efforts to improve the utility’s income statement, Eskom has realised savings of four billion Rands that was declared against a target of R3.1 billion.

This will further be complemented by a tariff increase of 15% for the 2022 financial year which has been granted to Eskom.

In terms of employee costs, the second round of voluntary severance packages are underway, and net savings are expected to be realised in the 2022 financial year.

The Deputy President said efforts are underway towards ensuring that procurement savings are delivered on.

Deputy President Mabuza said, meanwhile, that in relation to strengthening the balance sheet, a savings of R7.5 billion has been realised in terms of capital expenditure.

Processes are also underway to dispose non-core properties.

As far as the restructuring of Eskom into three divisions is concerned, the Deputy President said the division of the power utility was completed by March 2020 as the first step towards business separation, with functional separation to be completed by March 2021.

The establishment of a separate Transmission subsidiary is still targeted for completion by December 2021, with Generation and Distribution by December 2022.

He said the finalisation of this process will create the required certainty for prospective investors in generation capacity, in turn ensuring that bids are fairly adjudicated, relative to Eskom generation.

“As the Political Task Team on Eskom, we are comfortable with the notable progress in Eskom’s recovery of its operational performance that has been made thus far,” he concluded.

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